Firm says default notices dip slightly in Calif.

LOS ANGELES 
Mortgage default notices against California homeowners dipped slightly during the past quarter, as lenders and loan servicers took time to revise their foreclosure procedures and loan workout policies, a real estate tracking firm said Wednesday.

Nearly 125,000 mortgage default notices were filed during the April-June period, an 8 percent dip from the record high of roughly 135,000 filed during the first quarter of 2009, San Diego-based MDA DataQuick said.

Lenders in the most recent quarter appeared to take a breather from the relentless barrage of default notices, but filings would likely increase in coming months as efforts to collect intensify, DataQuick President John Walsh said.

"There is a perception that the housing market is dragging along bottom, that it probably won't get much worse, and that the lenders need to get serious about processing the backlog of delinquencies, either with workouts or foreclosure," Walsh said. "We're hearing that some lenders and servicers are doing just that."

The latest figures marked a 2 percent increase from the nearly 122,000 default notices recorded in the year-ago period, DataQuick said.

Notices of default are the first step in the formal foreclosure process.

The number of homes actually lost to foreclosure reached nearly 46,000 during the most recent quarter, up almost 5 percent from nearly 44,000 in the prior quarter but down about 28 percent from more than 63,000 during the year-ago period.

The firm also said foreclosures appeared to be spreading beyond the affordable inland communities where they have been concentrated and into higher-end coastal areas.

The neighborhoods hardest hit by the first wave of foreclosures accounted for 45 percent of all default activity last quarter, DataQuick said. Those communities, which account for a quarter of the state's housing stock, had accounted for more than 52 percent of default activity during the second quarter of 2008.